Ratio Analysis
Part 1 — what ratios are, the liquidity and solvency ratios of an imagined company, and how transactions move them.
In this lesson you will
- State how ratios are expressed and name the four groups of ratios in the ISC syllabus
- Compute and interpret the current ratio and the quick ratio using the Schedule III heads
- Compute and interpret the debt to equity, proprietary, debt to total assets and interest coverage ratios
- Work out whether a transaction increases, decreases or leaves unchanged the current, quick or debt-equity ratio
- Find missing figures from given liquidity ratios